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FRANKFURT (Reuters) – Euro zone governments must keep spending heavily to aid the bloc’s recovery from its historic pandemic-induced recession, complementing already super-easy monetary policy, European Central Bank President Christine Lagarde said on Sunday.

With debt levels blowing past 100% of GDP this year, concerns are rising that politicians will struggle to push through more support and some subsidies, raising the risk that employment and income schemes could abruptly end.

“Confidence in the private sector rests to a very large extent on confidence in fiscal policies,” Lagarde said in a speech. “Continued expansionary fiscal policies are vital to avoid excessive job shedding and support household incomes until the economic recovery is more robust.”

Employment subsidy schemes have already been extended in several countries but some are advocating longer, one- or two-year extensions to bolster confidence while the bloc recovers from recession that could slash 8% from output this year.

“Keeping

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The government is eyeing a huge savings in subsidy this year on cooking gas.

The savings is because the price of a domestic LPG or cooking gas cylinder of 14.2 kg has been hiked by ₹100 a cylinder from July 2019 to July 2020.

The price of a subsidised domestic LPG cylinder increased from around ₹494.35 a cylinder in July 2019 to ₹594 a cylinder in July this year across the country. It will temper a bit more when the price of domestically produced natural gas is revised for the October-March 2021 period.

 

Subsidy savings

“There would be a subsidy savings of between ₹18,000 crore and ₹22,000 crore because of the rise in domestic LPG cylinder prices. In 2019-20, the LPG subsidy outflow stood at ₹22,635 crore. Till now, in the first quarter of 2020-21, there has been a subsidy outgo of just ₹1,905 crore. This is a significant saving

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The Centre should borrow and compensate the States for the shortfall in GST revenues, rather than thrusting suggestions on them, West Bengal Finance Minister Amit Mitra said on Sunday.

West Bengal, which has already rejected the two borrowing options proposed by the Centre, will now take up the matter with other “like-minded State governments”, including BJP-ruled ones. The idea will be to “take the Centre into confidence” regarding the non-feasibility of these new mechanisms.

 

“The Centre needs to borrow the money and compensate States for shortfall in GST. State governments cannot borrow. It impacts their finances. Moreover, the Centre can monetise such deficits, which the State governments cannot,” Mitra told reporters during a virtual press conference.

Proposed mechanisms

Typically, monetisation occurs when the RBI directly purchases government securities in the primary market, which essentially amounts to printing more money.

The first option, so proposed, includes borrowing a projected shortfall of

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Facebook has become the latest company to attack Apple for taking a 30 per cent cut of in-app purchases, arguing that small businesses will suffer from the iPhone maker’s decision not to waive fees during the coronavirus pandemic. 

The social media company said on Friday that Apple had refused its request to waive a commission fee for businesses using its new online events feature.

It also said Apple declined to let it use its own payments technology, Facebook Pay, to process payments for businesses — which it said it would have done for free. 

“During these times when businesses are struggling, Apple requires apps on iOS to use its payment system and takes a 30 per cent fee on transactions,” Fidji Simo, head of the Facebook app, said. “For paid online events that means that small businesses and creators will [forego] 30 per cent of every dollar they earn.”

Apple

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